Analysis of Financial Results

March 2017 Table of Contents

Company Overview

Financial Performance

Annexure

Business Strategy

2 Company Overview

1. Time tested Bank with over 93 years of banking history

2. Pan-India footprint

3. Robust technology and risk management systems

4. Strong productivity, capital adequacy ratios

5. Experienced management team & Professional Board

6. Highest Standards of Corporate Governance

7. Business Process Reengineering under implementation

8. Consistent track record of profit since inception

9. Powered by KBL - VISION 2020

3 History & Evolution

• Incorporated in 1924, Karnataka Bank is one of the oldest time 2017 • Networth of the Bank crossed Rs. 5,000 crs 2016 • Completed 1:2 rights issue to raise Rs. 658.96 crs tested private sector Banks. 2015 • Unveiled KBL – VISION 2020 & adopted Vision Statement • No. of ATMs crossed 1,000 • Offers wide variety of corporate 2014 • Business turnover crossed the milestone of Rs. 75,000 crore 2013 • Secured ISO 27001 : 2005 Certificate from NQA and retail banking products and • BPR implementation under the guidance of M/s KPMG Advisory Services Pvt Ltd. commenced • Business Turnover crossed the milestone of Rs. 50,000 crore services to over 8.2 million 2012 • No. of branches crossed 500 • Average turnover per branch crossed Rs. 100 crore customers. • Launched ASBA facility

2011 • Right issue of Rs. 457.03 crore in the ratio of 2:5. • Forayed into General Insurance • Launched Online Trading facility 2010 • Maiden QIP aggregate Rs. 160.83 crs. business as a JV partner in 2009 • Compliance with Basel-II norms

Universal Sompo General 2007 • Completion of 100% core banking • Floated general insurance JV along with Allahabad Bank, Indian Overseas Bank, Dabur Insurance Company Limited. 2006 Investments and Sompo Japan Insurance • Launched CDSL-DP services at select branches • 2,148 service outlets with 765 2005 • Completed 2:1 rights issue to raise Rs. 160 crs • Right issue in the ratio of 1:2 branches, 3 Extension Counters 2003 2002 • Bancassurance tie-up with MetLife • Maiden bonus issue in the ratio of 1:1 and 1,380 ATMs in 509 centres 2000 • Implementation of “Finacle” CBS

across India as on Mar 31, 2017. 1995 • Public issue of 45 lakh equity shares in October 1995 1977 • Became an authorised dealer of foreign exchange Rs. 93,737 1960 • Took over assets and liabilities of Sringeri Sharada Bank Ltd, Chitaldurg Bank & Bank of • Business Turnover of to 1966 Karnataka, Hubli. crore as at 31.03.2017. • Incorporated on 18th February 1924 at Mangalore by Late B R Vyasarayachar & other leading 1924 4 members of the South Kanara Region Awards & Accolades

Awards & accolades received during the current FY 2016-17 :  4 Social Banking Awards instituted by the ASSOCHAM under Small Bank category:  Winner – Government Schemes & Priority Sector Lending,  Runner Up – Agricultural Banking & Overall Best Social Bank.  Best MSME Bank Award [Private sector] 2016 instituted by The ASSOCHAM.  IBA – Banking Technology Awards 2017 under Small Bank category:  Winner - Best Financial Inclusion Initiatives  Runner Up - Best use of Digital and Channels Technology.  FIEO - Southern Region Export Excellence Award: Best Financial Institution [Southern Region] under Gold Category, instituted by FIEO.  Greentech Safety Award 2016 instituted by M/s Greentech Foundation, New Delhi, under ‘Gold’ category in Banking sector.  Certificate of Special Mention for use of Technology for Financial Inclusion among Small Banks, instituted by IDRBT.  CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar – 2015 - “Certificate of Merit” under ‘Service Enterprises – Large’ category.  ‘Award of Excellence’ for “Outstanding Performance in MSME funding” instituted by FITS. 5 Awards & Accolades – contd..

Awards & accolades received recently:

 STP Award 2016 in recognition of its outstanding payment formatting & Straight- Through Rate instituted by The Bank of New York Mellon.

 MSME Banking Excellence Award - 2016, instituted by CIMSME:

 Runner Up - CSR Initiatives & Business Responsibility [Emerging category].

Shri Raghurama, General Manager, receiving the awards from Shri Arjun Ram Meghwal, Hon’ble Minister of State for Finance and Corporate Affairs and Shri Mukhtar Abbas Naqvi, Hon’ble Minister of State for Minority Affairs (I/C) and Parliamentary Affairs, on April 20, 2017, at New Delhi. Bank has bagged the award, instituted by Chamber of Indian Micro Small & Medium Enterprises [CIMSME], under the category: CSR Initiatives & Business Responsibility Award – Runner Up (Emerging Category).

6 Pan-India footprint Pan-India Presence No of branches & ATMs  Total 2,148 outlets –765 branches, 3 Extension Counters & 1,380 ATMs Branches ATMs 1,380  Total 30 e-Lobbies & 80 mini e-Lobbies 1,275  Specialized branches for Forex, Industrial, Agriculture, 1,000 MSME, Corporate business & Financial Inclusion 675 725 765  102 Financial Inclusion branches, 37 Ultra Small branches  Expanding network in northern India also.

Mar '15 Mar'16 Mar '17 23 6 2 5 9 Area wise distribution of branches (Dec ‘16) * 6 11 2 Metro 1 Rural 28% 3 10 7 18 21% 4 8 47 18 17 Has the strongest presence in Semi Urban 25 South India with 596 branches Urban 27% 7 34 24% 473 Top 5 States: 1 Karnataka (473), Tamilnadu (51), 51 Maharashtra (47), Andhra Pradesh (34), 19 Delhi (23) 7 Robust technology platform and risk management systems

Strong technology platform The existing “ISO 27001:2013” certificate encompassing the Information Security Management System (ISMS) at the Bank’s Data Centre, Near line Site [NLS] at Bengaluru and Information Technology Department including the DR site [IT & DR] at Head Office, Mangaluru, has been renewed by AJA Registrars, UK, for a further period of three years up to March 2019, reflecting the Bank’s continued commitment to technology adoption.  Pioneer in implementing “Finacle” (CBS) amongst the old generation private sector banks  State-of-art IT set up which has enabled Anytime Anywhere Banking through alternate delivery channels such as ATMs, VISA International Debit Card, RUPAY Debit Card, Internet Banking, Mobile Banking, IMPS, e-lobby etc.  Enabled Online Account Opening, implemented ‘M-Passbook’ (Mobile Passbook), ‘KBL Apna App’ (SMS Banking) etc as additional facilities for the convenience of customers.  Also offers other products such as NGRTGS, NEFT, NECS, CTS, Online Trading, ASBA facility, Gift Card, Travel Card, Biometric Smart Card under Financial Inclusion, PoS Network, Online inward remittance facility to NRIs etc.  Implemented Lending Automation Processing System (LAPS) software for efficient life cycle management of loan accounts and improved monitoring.  Implemented an Enterprise Level Fraud Risk Management System (ELFRMS) for effective cyber fraud prevention across delivery channels.  Launched Mobile Banking App on Unified Payment Interface (UPI) Platform branded “KBL SMARTz”. 8 Robust technology platform and risk management systems

Effective risk management system  Periodical monitoring & reviewing of risk profile of the bank .  Internal Credit Rating of all the borrowers: Credit exposure above INR 25 lakh are rated borrower-wise and credit facilities below INR 25 lakh & all schematic advances including agri-credit proposals are rated under ‘Pool based approach’.  Continuous offsite surveillance of borrower accounts.  Effective ALM/mid office set up to monitor Liquidity risk/ Market risk on a continuous basis.  For effective Operational risk management: o Bank is building up a database of internal Loss data, near- miss cases and other Operational risk events, since Sept 2007. o Bank has an effective AML monitoring system to scrutinize the customer transactions to ensure compliance to the extant guidelines.  Bank has taken all necessary steps for migration to ‘Basel II advanced approaches’ under Credit, Market and Operational Risk and also complied with the extant ‘Basel III’ guidelines of RBI.  Bank has implemented a scientific Fund Transfer Pricing (FTP) & Customer Profitability Management System (CPMS) to assess the performance of branches / products / portfolios / customers.

9 Highlights - 2016-17

(Rs. crs) Q4 of KPAs FY 2016-17 FY 2016-17 Net profit 138.37 452.26 Operating profit 329.27 995.80 Turnover 93,737 93,737 Return on Asset 0.85% 0.74% Earning per Share * 4.90 19.38 Return on Equity 10.83% 10.24% Net Interest Margin 2.17% 2.44% Gross NPA 4.21% 4.21% Net NPA 2.64% 2.64% Cost to Income 50.40% 56.70% CRAR (Basel III) 13.30% 13.30% * Not annualized 10 Financial strength of the Bank

Networth (Rs. crs)

Capital Reserves 5,143

4,000 3,389 3,691

4,860

2,000 3,201 3,502

188 188 0 283 Mar '15 Mar '16 Mar '17 Market capitalisation (Rs. crs)

3,975 4,000

2,349 1,935 2,000

0 Mar '15 Mar '16 Mar '17

11 Return and Capital Adequacy Ratios

Return on Equity (%) (after tax) Return on Assets (%) (after tax)

20% 1.5% 0.91% 15% 14.02% 0.74% 11.73% 10.24% 1.0% 0.76% 10% 0.5% 5%

0% 0.0% Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Mar '17

Capital Adequacy (%) - Basel III

Tier I Tier II 13.30 12.41 12.03 12 1.09 1.89 1.47

8 12.21 10.52 10.56 4

0 Mar '15 Mar '16 Mar '17

12 Productivity ratios

Operating Profit per employee (Rs. lakh) Operating Profit per branch (Rs. lakh)

15 12.5 130.2 12 10.5 11.0 114.6 117.9

9 100

6 50 3

0 0 Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Mar '17

Business per employee (Rs. crs) Business per branch (Rs. crs) 11.7 12 10.5 10.8 122.5 120 115.1 116.4 9 80 6 40 3

0 0 Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Mar '17

13 Financial Performance

14 Income & Profit

Net Income (Rs. crs) Operating and Net Profit (Rs. crs) Net Interest Income Other Income 2,500 2,300 Operating profit Net profit 996 1,000 2,000 1,846 855 1,676 809 773 750 1,500 507 543 451 452 1,000 500 415 1,491 1,169 1,303 500 250

0 0 Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Mar '17

Net Interest Margins (%) Cost to Income Ratio (%) 3.0% 60% 56.70% 53.84% 53.68%

2.40% 2.44% 2.5% 2.36% 50%

2.0% 40% Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Ma r'17

15 Deposits

Deposits (Rs. crs) CASA share to total Deposits

CASA Retail Wholesale deposits 29.04% 30% 26.26% 60,000 56,733 24.94% 171 50,488 20% 50,000 46,009 154 166 10%

40,000 0% 40,089 Mar '15 Mar '16 Mar '17 37,073 30,000 34,370

20,000

Deposits break up (Mar ‘17) 10,000 16,473 11,473 13,261 Savings 0 Current Bank Account Mar '15 Mar '16 Mar '17 22.65% 6.39%

Retail Wholesal Term e Deposits deposits 70.66% 0.30%

16 Deposits

Cost of Deposits NRI deposits 6.17% 7.87% 8% 7.51% 6.73% Domestic deposits 6% 93.83%

4% NRI Deposits (Rs. Mar '15 Mar '16 Mar '17 crs) Amount %

3,502 10% 3,045 3,000 2,497 6.03% 6.17% 8% 5.43% 6% 2,000 4% 1,000 2%

0 0% Mar '15 Mar '16 Mar '17

17 Advances

External rating wise Credit Portfolio as of Mar ‘17 Advances (Rs. crs) [corporate borrowers]

No of Balance O/s % to 37,004 Rating 33,902 Borrowers (in crs) GBC 35,000 31,680 30,000 AAA 8 1,486.31 3.95% 25,000 20,000 AA 21 1,853.60 4.93% 15,000 10,000 A 28 1,260.96 3.35% 5,000 BBB 29 1,221.38 3.25% 0 Mar '15 Mar '16 Mar '17 BB 23 1,202.09 3.20% B 15 500.02 1.33% C 1 39.11 0.10% D 12 916.71 2.44% Total 137 8,480.18 22.56% Gross Bank Credit 37,585.24

18 Advances

Retail & Corporate Advances (%) Segmentation of Advances (Mar ‘17) Retail Advances Corporate Advances Agricultur e * 52.8% Micro- 50.2% 52.6% Others 14.36% 49.8% 47.2% 47.4% Small Ent. 50% 28.23% 22.60%

25%

0% Mar '15 Mar '16 Mar '17 Other Personal Medium loans Housing Large Ent. Ent. 5.99% 13.24% 12.11% 3.47%

* However, this works out to 18.38% of the ANBC of 31.03.2016.

19 Advances

Priority Sector Advances (Rs. crs)

Amount % * 48.13% 20,000 46.91% 46.82% 47.57% 60% 45.26% 16,150 17,239 16,000 14,345 12,996 40% Agriculture Advances (Rs. crs) 12,000 9,482 Amount % 8,000 6,583 20% 5,837 4,000 6,000 18.63% 5,146 18.0% 4,790 18.38% 0 0% 3,903 17.19% * 4,000 17.29% 16.79% 15.0% Mar '13 Mar '14 Mar '15 Mar '16 Mar '17 2,000 12.0%

0 9.0%

Mar '13 Mar '14 Mar '15 Mar '16 Mar '17 Advances to Weaker Section (Rs. crs)

Amount % 3,000 2,528 2,820 2,585 2,603 2,544 11.0% 2,000 12.07% 10.18% 6.0% 1,000 8.44% 7.67% 7.10% * 0 1.0%

Mar '13 Mar '14 Mar '15 Mar '16 Mar '17 * Base figure for the calculation of % is ANBC as on March 31st of previous year. 20 CD Ratio & Yield on Advances

Credit Deposit ratio (%)

CD Ratio Incremental CD Ratio [Annual] Incremental CD Ratio [Quarter] 200% 173.4% 150% 111.0% 118.2% 65.2% 100% 49.7% 68.9% 61.5% 67.2% 49.6% 50%

0% Mar '15 Mar '16 Mar '17

Yield on Advances & Interest Spread (%)

Yield on advances Interest spread 15% 11.97% 11.55% 10.81% 10% 4.10% 4.04% 4.08% 5%

0% Mar '15 Mar '16 Mar '17

21 NPAs

Gross NPAs (Rs. crs) Net NPAs (Rs. crs)

Gross NPA Gross NPA % 1,582 Net NPA Net NPA % 6% 3.0% 1,600 975 1,180 5% 1200 795 2.5% 1,200 944 4% 624 2.64% 900 2.35% 2.0% 4.21% 3% 800 3.44% 1.98% 1.5% 2.95% 2% 600 400 1.0% 1% 300 0.5% 0 0% 0 0.0% Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Mar '17

Fresh accretions and recoveries (Rs. crs)

Fresh Accretions to NPA Stock Recovery / Upgradation

1500 1,348 1,125 930 947 1000 822 889

500

0 Mar '15 Mar '16 Mar '17

22 Restructured Advances

(Rs. crs) Restructured loans & related accounts

Restructured loans Related a/cs Of which, NPA Sector wise Restructured Adv. as Mar ‘17: 2,500

2,335 Restructured Of which, 2,000 Sector 328 1,808 Adv. NPA

1,500 625 1,365 Infrastructure 626.29 62.99

434 Large Industry 493.42 170.17 1,000 1,696 1,183 932 MSME [excl. Infrastructure] 94.48 44.73

500 328 224 261 Others 53.62 33.40 Real Estate 0 [including CRE, excluding 48.82 1.48 Mar '15 Mar '16 Mar '17 Services] Agriculture 46.12 15.22

Wholesale/Retail Trade 1.93 - [excl. services]

Education 0.47 0.05 [Individual + Institution] Grand Total 1,365.15 328.05

23 Investments

AFS Rs. Investments [excl. RIDF] ( crs) 42.50% HFT 0.24% 20,220 20,000 16,257 14,032 15,000

10,000

5,000 HTM 0 57.26% Duration Mar '15 Mar '16 Mar '17 AFS HFT HTM TOTAL 1.46 0.44 5.52 3.79

Debentures, Bonds, CD, MF Yield on Investments (excl. RIDF & MF) (%) 30.88% SLR 7.51% 7.45% 8% 7.23% 68.65% 6% Shares 0.47% 4% Mar '15 Mar '16 Mar '17

24 Share holders’ value

Share holding pattern (Mar 2017)

Banks, FIs, MF, Insurance Earning Per Share (Rs.) Cos Foreign 11.55% Portfolio Investors 23.96 Others 19.20% 25 19.68 19.38 9.37% 20 15 10 5 0 Mar '15 Mar '16 Mar '17 Indian Public 59.87%

Book value (Rs.) Dividend (%) 225 195.83 60% 50% 50% 179.84 181.97 50% 40% * 40% 175 30% 20% 125 10% 0% 75 Mar '15 Mar '16 Mar '17 Mar '15 Mar '16 Mar '17 * Proposed 25 Leveraging on Technology

Migration to Digital Channel [share of ADC transactions to total CBS transactions]

60% 53.06% 50.41%

44.49% 42.26% 40%

20% Mar '14 Mar '15 Mar '16 Mar '17 Annexure

27 Deposits & Advances

Rs. crs Mar-15 Mar-16 Mar-17

Total Deposits 46,009 50,488 56,733

CASA Deposits 11,473 13,261 16,473

Retail Deposits 34,370 37,073 40,089

Wholesale Deposits 166 154 171

Total Advances 31,680 33,902 37,004

Priority Sector Advances 14,345 16,150 17,239

Agri Advances 5,146 5,837 6,583

MSE Advances 6,359 8,037 8,496

Advances to Weaker Section 2,585 2,603 2,544 28 Income & Expenditure

Rs. crs Mar-15 Mar-16 Mar-17

Interest Income 4,698 4,992 5,185 Interest Expense 3,529 3,689 3,694 Net Interest Income 1,169 1,303 1,491 Fee Income 394 481 505 Treasury Income 113 62 304 Non-Interest Income 507 543 809

Total Income (Net of Interest Expense) 1,676 1,846 2,300 Operating Expenses 952 991 1,304 Operating Profit before exceptional item 723 855 996 Less: Exceptional item -50 - - Operating Profit after exceptional item 773 855 996 Provision for loan losses in Adv. / losses in 322 440 544 Invts. / Taxes / other

Net Profit 29 451 415 452 Interest Income & Interest Expenditure

Rs. crs Mar-15 Mar-16 Mar-17

Interest Income Interest Income 4,698 4,992 5,185 Interest on Advances 3,506 3,700 3,794 Interest on Investments 1,086 1,190 1,298 Other interest 106 102 93 Yield on Advances 11.97% 11.55% 10.81% Adjusted yield on Invts. 8.70% 7.76% 9.03% Interest Expense Interest Expense 3,529 3,689 3,694 Interest on Deposits 3,408 3,588 3,601 Other interest 121 101 93 Cost of Deposits 7.87% 7.51% 6.73% Net Interest Income Net Interest Income 1,169 1,303 1,491 Interest Spread in Lending 4.10% 4.04% 4.08%

Net Interest Margin on average assets 30 2.36% 2.40% 2.44% Capital Adequacy under BASEL III

Rs. crs Mar-15 Mar-16 Mar-17

Total Risk Weighted Assets 32,021 34,787 38,902

Total Capital Fund 3,974 4,185 5,172

Total Tier I Capital 3,369 3,675 4,749

Paid up Equity Capital 188 188 283

Reserves under Tier I Cap. 3,181 3,487 4,467

Total Tier II Capital 605 510 423

Surplus Provisions & Reserves 250 250 258

Subordinated Debt Fund 355 260 165

Total CRAR 12.41% 12.03% 13.30%

CRAR Common Equity Tier I Capital 10.52% 10.56% 12.21%

CRAR Tier I Capital 10.52% 10.56% 12.21%

CRAR Tier II Capital 1.89% 1.47% 1.09% 31 Other initiatives / developments  Launched Mobile Apps, viz., • “KBL-ApnaApp” & “KBL-mPassBook” for enabling customers to carry on a host of banking activities through their mobile phone, • “KBL-POS Manager” for POS merchants, • “KBL-Smartz” on Unified Payments Interface (UPI) platform of NPCI.  Launched ‘KBL-Mobile’, a updated version of Mobile Banking.  Launched FEBA [Finacle E-Banking Application], a updated version of Internet Banking.  Launched RuPay Inernational Platinum Debit Card.  Launched co-branded Credit Card, in association with SBI.  Tied up with Bajaj Allianz General Insurance Co. Ltd for distribution of general insurance products.  Tied up with 4 Asset Management Co.s, viz., UTI MF, Birla Sun Life MF, SBI MF & LIC MF, for distribution of their Mutual Fund products.  Introduced online account opening.  Extension of Single Window System to more branches, with Automated Token System.  HRMS project is implemented, by which most of the HR activities are now digitized & centralized, paperless, instantaneous & more efficient. 32 Other initiatives / developments (contd…)  Introduced online loan application submission for MSME and other retail loans through Bank’s website.  Introduced Aadhaar Enabled Payment Systems [AEPS] “On-Us” transactions at all the 113 BC locations, with which, any customer of our Bank with Aadhaar enabled account can transact at any of the BC locations of our Bank.  Under national level “APY – Customer First” campaign conducted by the PFRDA, all the top 5 positions have been bagged by our branches, under the category of ‘Other Private Banks’.  Under national level “APY Fortune-100” campaign conducted by the PFRDA, 4 of our branches have been selected as Winners of the “Fortune-100” contest.  Entered into MOU with M/s Tirth Agro Technology Pvt. Ltd, a company engaged in manufacturing and marketing of Agriculture implements & Equipments under brand name of "Shaktiman" of various models and variants to finance the purchase of agriculture equipments and machineries by the farmers.  Signed an MOU with M/s National Collateral Management Services Ltd, a company engaged in providing godown services to the farmers / agriculturists for financing against the Warehouse Receipts to farmers helping them to avoid distress sale.  Introduced a special scheme KBL AGRO PROCESSING to cater to the requirements of the Agro Processing / Food Processing industries, so that the crops grown by the farmers are

further processed and thereby enhance the returns33 to the farmers. Corporate Social Responsibility

Sponsorship of Modernized Neonatal Intensive Care Unit (NICU) to the Paediatric Department of KVG Medical College & Hospital (KVGMCH), Sullia.

Donation of dish washer system to Anegudde Shree Vinayaka Temple, Kumbhasi. Business Strategy

35 Highlights of KBL – VISION 2020 Document  Bank has adopted a Vision Statement, “To be a Progressive, Prosperous and well Governed Bank”.

 Bank’s total business turnover is projected to increase in a progressive manner to touch Rs. 1,80,000 crore by March 2020, with deposits of Rs. 1,00,000 crore & advances of Rs. 80,000 crore.

 Service outlets are projected to touch 3,500 [1,000 Branches + 2,500 ATMs] by March 2020. E-lobbies / Mini e-lobbies to touch 250.

 Digital Banking initiative to be taken forward by increasing the digital touch points.

 Bank aims to become a Preferred Banker to atleast 1% of India’s population by March 2020.

 Credit quality initiatives, Risk management practices, Compliance culture & Marketing initiatives to be further strengthened.

 Rationalization of ATMs & Branches. 36 Corporate Goal for 2017 -18

 Business Turnover of Rs. 1,10,000 crore.  Opening of 35 new Branches to take the total no. of Branches to 800.

 To introduce following products and services:

 Cash Recyclers,

 Corporate Mobile Banking,  KBL Locator and e-Address book app.  Tie up with Life Insurance Corporation of India for distribution of life insurance products.

 Centralized account opening.

37 Business Strategy

 Focus on accounts / salary accounts of HNIs, ‘Educational Institutions’, ‘Govt. and Pvt. Organizations’, ‘IT Companies’, ‘Temples’ etc.  Targeting working women/Professionals/ housewives.  Providing value added service such as ‘Personal Accident Insurance Scheme’, viz., KBL – Suraksha.  Increasing the penetration level of alternate delivery channel products and enhance the digitalization at Bank  Holding CASA Campaigns to reach out new clients.  Thrust on retail loans.  Holding Housing & Car loan campaigns to have focused attention.  Focused attention to the Credit Oriented Branches.  Business generation through dedicated Marketing Team.  Holding regular Big Login Days for generation of life insurance products.  Aggressive marketing of general insurance products.  Holding regular K Health Care Day for generation of health insurance products.  Tie up with more Asset Management Co.s for distribution of their mutual fund products.

38

WE EXPRESS OUR HEARTFELT GRATITUDE FOR

OVERWEHLMING SUBSCRIPTION TO OUR RIGHTS

ISSUE DURING THE FY 2016-17 AND TO ALL OUR

STAKE HOLDERS FOR THEIR TRUST & SUPPORT

AND SOLICIT THEIR CONTINUED PATRONAGE, AS

WE CONTINUE OUR JOURNEY WITH RENEWED

DEDICATION & COMMITMENT TO MAKE OUR

BELOVED KARNATAKA BANK A FINANCIAL

POWER HOUSE.

39 Board of Directors

P Jayarama Bhat Mahabaleshwara M S Non Executive Chairman Managing Director & CEO

Ashok Haranahalli Mrs Usha Ganesh, IAS Bengaluru Rammohan Rao Belle Bengaluru Bengaluru Advocate Former Member of Karnataka Administrative Former MD & CEO, Tribunal SBI Gen. Insu. Co. Ltd

U R Bhat B A Prabhakar Mumbai Bengaluru Investment Adviser & Former Chairman & MD of Columnist Andhra Bank

Keshav Krishnarao Desai D. Surendra Kumar, Hubballi Shri Kshethra Dharmastala, Businessman Dakshina Kannada Edicationist

40 Disclaimer

This presentation has been prepared by Karnataka Bank (the “Bank”) solely for providing information about the Bank. This presentation is confidential and may not be copied or disseminated, in whole or part, in any manner. This presentation has been prepared by the Bank based on information and data which the Bank considers reliable, but the Bank makes no representation or warranty or undertaking, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness, correctness and reasonableness of the contents of this presentation. This presentation has not been approved and will not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India and may not comply with all the disclosure requirements prescribed thereof. This presentation may not be all inclusive and may not contain all of the information that you may consider material. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any securities. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. Neither the Bank nor any of its respective affiliates, advisers or representatives, shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward-looking statements”, including those relating to the Bank’s general business plans and strategy, its future financial condition and growth prospects, and future developments in its industry and its competitive and regulatory environment. Actual results may differ from these forward-looking statements due to a number of factors, including future changes or developments in the Bank’s business, its competitive environment, information technology and political, economic, legal and social conditions in India and worldwide. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Bank disclaims no obligation to update forward looking statements to reflect events or circumstances after the date thereof. This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particular person. This presentation and any information presented herein are not intended to be, offers to sell or solicitation of offers to buy the Bank’s equity shares or any of its other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. The Bank’s equity shares have not been and will not be registered under the U.S. Securities Act 1993, as amended (the Securities Act”) or any securities laws in the United States and, as such, may not be offered or sold in the United States or to, or for the benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act) absent registration or an exemption from the registration requirements of the Securities Act and applicable laws. Any offering of the equity shares made, if any, in the United States (or to U.S. persons) was made by means of a prospectus and private placement memorandum which contained detailed information about the Bank and its management, as well as financial statements. The Bank may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person.

41